Cigna set to buy Express Scripts for about $54 bn

ReutersNew YorkUS health insurer Cigna Corp said on Thursday it would buy pharmacy benefits manager Express Scripts Holding Co for about $54 billion, a tie-up that reflects pressure on healthcare companies to grow bigger to cut costs.The move follows the $69-billion merger of insurer Aetna Inc and one of Express Scripts'biggest rivals, CVS Health Corp, announced last December.The companies said the combination will save $600 million due to administrative efficiencies. They can cut costs as they better coordinate pharmacy and medical claims. It could also increase their leverage in price negotiations with drugmakers.Cigna's offer consists of $48.75 in cash and 0.2434 shares of stock of the combined company for each Express Scripts share, amounting to $96.03 per share. That represents a premium of nearly 31 percent to Express Scripts'Wednesday closing price.Express Scripts shares were up 18.6 percent at $87.10, while Cigna shares were down 4.25 percent at $186.The transaction is valued at $67 billion, including about $15 billion in Express Scripts'debt, the company said.Pharmacy benefit managers administer prescription drug programs for health insurers, self-insured companies and government agencies, negotiating deals with drug manufacturers, working with pharmacies and processing claims.

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